Barclays' competitive advantage in the US
"Barclays started its US stint (owing to its well-established UK operations) at a time when the other players were struggling even to penetrated into foreign territories. Barclays started in US market by forming Barclays Bank of California in 1965 and founded Barclays Bank of New York in 1971. Both of these banks helped gain Barclays a competitive advantage of being functional on both US coasts.
In late 1970s, it opened a chain of branches and agencies in all prime cities of the country. By 1974, Barclays acquired the first Westchester National Bank of New Rochelle, New York. The company was already present and functioning in 37 states by 1986.
Barclays Capital acquired Lehman Brothers which aided its expansion plans in North America in the year 2008, it is doing equally good in credit cards business; as much as seven million cards are already in circulation in US market. The acquisition of Lehman Brothers also catalyzed the presence of Barclays Wealth in US market.
Barclays' services at US offers:
- Barclaycard: an array of credit cards
- Barclays Capital: provides risk management, financial and capital solutions to businesses, corporate and institutions.
- Barclays Wealth: Wealth Services like Investment services, Private Banking are made available to HNI Clientele and premier customers.
Analysts at Royal Bank of Scotland are of the opinion that Barclays PLC has a strong liquid asset support in its US operations. It is listed as BCS on New York Stock Exchange and has a market capitalization of 28.89 B USD. Strong competitors to Barclays are Royal Bank of Scotland, HSBC Holding PLC, Citigroup Inc, Lloyds TSB Group PLC, and Bank of America Corp. Barclay's Wealth is aggressively hiring in the US. These being a part of their manpower expansion strategy which will lead to the number of bankers double the current number in a time-span of three years.
As per the Q2, 2011 reports, it made a net profit margin of 12.96% as opposed to 14.35 % in Q2, 2010. US economy has still not recovered completely and the Stock prices are still down. Banks and companies providing financial services still face various threats like interest rate fluctuations by Federal Bank, economy downturn, less investment by customers etc.
Will Barclays be able to expand its branches in US? Will it start offering other financial services to US? Will it customize its service portfolio to the needs and requirements posed by US Customer base?